Comex gold prices have moved above unchanged levels on the day in morning trading Friday. Precious metals rebounded from moderately lower levels in earlier trading as bargain hunters stepped in to buy the dips in gold and silver prices, and as short covering entered the markets. Friday’s much-anticipated GDP report came in a bit stronger than forecast, which did alleviate some of the risk aversion seen overnight and in early trading. December gold last traded up $2.20 at $1,715.20 an ounce. Spot gold was last quoted up $3.60 at $1,714.50. December Comex silver last traded up $0.137 at $32.235 an ounce.

(Note: I was out of the office Wednesday and Thursday, speaking at a precious metals investment symposium in New Orleans. I know I have a great job when I can’t wait to get back home to once again serve you, my valued reader.—Jim)

It’s still somewhat of a “risk-off” day in the market place early Friday. The European and Asian stock markets were lower following more disappointing U.S. earnings reports (Apple, Amazon) and in the wake of a move by the Standard & Poors credit rating agency overnight to downgrade the French bank BNP Paribas, as well as lower its outlook for two other French banks-- Societe Generale and Credit Agricole. The agency said economic conditions are deteriorating in France and southern Europe. Meantime, Greece remains in a precarious financial condition, needing more bailout funds than expected in the near term, as the European Union leaders try to figure out the next step to take on that matter. And there were also reports overnight that a European Central Bank official said Italy’s banking sector is under severe strains. All of the above have pressured the Euro currency and supported buying interest in the U.S. dollar Friday morning.

The market place was girding for Friday morning’s release of the U.S. advance third-quarter gross domestic product report. That report was expected to show the U.S. economy grew at a rate of 1.8%, on an annual basis, in the third quarter. The figure came in at up 2.0%, which did allow the crude oil market to rebound a bit, and put some downside pressure on the dollar index due to the slight alleviation of the risk-off” trader mentality seen earlier Friday.

Reports coming out of India are seeing better demand for physical gold amid the festival season in that country.

The U.S. dollar index is trading slightly higher Friday morning and hit a fresh six-week high, on some perceived safe-haven demand. The U.S. dollar bears still have the overall near-term technical advantage, but the greenback bulls are gaining upside technical momentum this week. Meantime, Nymex crude oil prices are slightly lower and hovering not far above the recent 13-week low. The crude oil bears have gained the overall near-term technical advantage. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.

U.S. economic data due for release Friday includes the GDP report and the University of Michigan consumer sentiment survey.

The London A.M. gold fixing is $1,704.00 versus the previous P.M. fixing of $1,715.50.

Technically, gold futures bears have gained fresh downside near-term technical momentum recently. Prices are hovering near a six-week low and have been trending lower on the daily bar chart for three weeks. Bulls are fading badly and need to show fresh power soon to avoid more serious near-term chart damage. The gold bulls’ next upside price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,731.20. Bears' next near-term downside price objective is closing prices below psychological support at $1,700.00. First resistance is seen at the overnight high of $1,715.50 and then at $1,725.00. First support is seen at this week’s low of $1,698.70 and then at $1,690.00.

December silver futures are also hovering near a seven-week low. Prices are in a four-week-old downtrend on the daily bar chart. Silver bulls have faded badly and need to show fresh power soon to avoid more serious near-term chart damage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $32.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $31.00. First resistance is seen at $32.00 and then at the overnight high of $32.225. Next support is seen at this week’s low of $31.535 and then at $31.25.

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